Work, subsidies and finances

Good to know about employment contracts

Employment contract

An employment contract is an agreement between the employee and the employer, by which the employee commits to working for the employer under the employer’s direction and control in exchange for a salary or other remuneration. The employment contract should always be made in writing, even though an oral agreement is, in principle, equally valid. However, in a conflict situation, it is easier to prove what was agreed at the beginning of the employment with a written agreement. The employment contract should detail matters such as a possible trial period and its duration, whether the agreement is valid until further notice or fixed-term, the start date of the job (and, in a fixed-term agreement, the duration of the job), the location of the job, the nature of the work duties, the salary and the salary payment period, working hours, the collective agreement with which the employment contract complies and the period of notice.

Salary

Upon the payment of the salary, the employee must be provided with a salary statement, a salary breakdown or a corresponding document detailing the basic salary, remunerations paid and payments deducted from the salary, which include a tax deduction at source, an unemployment insurance payment, an employment pension payment and a social-security payment. Every time you receive a salary payment, make sure that you have been paid for all evening work, weekend work and overtime remunerations and other payments. All work experience you have acquired since turning 18 will contribute to your employment pension.

Collective agreement and trade unions

Labour laws are there to protect employees. The laws are complemented by collective agreements (työehtosopimukset, TES) made between trade unions and employers, in which matters are agreed in more detail than in the laws. The employment contract should detail which industry’s collective agreement is applied in the job. The employer must comply with the collective agreement. Matters determined in the collective agreement (such as the salary and working hours) are so-called minimum levels that must be met in the employment contract. However, the collective agreement does not prohibit the employee from agreeing with the employer on, for example, a higher salary or other benefits. By becoming a member of a trade union you will usually join an unemployment fund as well. If you meet the eligibility criteria, this entitles you to an earnings-related unemployment allowance during your unemployment. Trade unions offer other benefits to their members as well, such as the opportunity for legal counselling.

Proof of employment

Proof of employment is an important document to an employee, and you should be careful not to lose it. When you are later applying to an educational institution or for another job, your previous work experience may be a very important factor. You have a legally prescribed right to receive a proof of employment after your employment has ended. This document must detail matters such as the duration of your employment and your job title. If you want to, you can also ask your employer to evaluate your performance in the document. The evaluation must be objective.